Coronavirus: Youth unemployment fears as school leaver hiring drops by a third

Students mark their 'leavers day' early as schools closed due to the pandemic in March. (Christopher Furlong/Getty Images)

The UK’s leading student employers have slashed recruitment of school leavers and apprentices by a third because of the coronavirus, according to a new survey.

A poll also shows recruiters cutting hiring plans for graduates, delaying or withdrawing job offers and cancelling internships as the economic fallout of the pandemic deepens.

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The figures come amid mounting concerns that youth unemployment could soar as students finish courses this summer, with experts warning of long-term damage to their career prospects. Unions and think tanks have called for a government-funded jobs scheme for unemployed young people.

The Institute of Student Employers (SE) surveyed 193 firms in late April and early May, across the UK. It found hiring for entry-level jobs overall had dropped by almost a quarter compared with employers’ plans before COVID-19 struck. Internships and placements have been reduced most, down 40%.

Firms said they were hiring 32% fewer school leavers and apprentice recruitment than planned. Graduate hiring dropped too but far less starkly, down 12%.

“Some employers are backing graduates over non-graduates and others have found it too difficult to start new apprenticeships, which means that school leavers will be among the hardest hit by the crisis,” said the employer association’s chief executive Stephen Isherwood.

The change in the number of new hires firms expect to take on compared to just before the crisis. (ISE)

More than one in seven respondents said they could not even confirm their recruitment numbers for this year, in a stark sign of the scale of uncertainty and strain facing companies.

The study, in collaboration with the Association of Graduate Careers Advisory Services, showed even young people with job offers had taken a hit. 14% of employers had already withdrawn job offers, and another 14% said they may do so in the coming weeks.

Almost a third of firms had delayed start dates for new hires, and more than half planned to induct new starters remotely.

Smaller and medium-sized firms were more likely to have cut hiring than larger firms. The ISE’s new report published on Monday said they were “more likely to be experiencing critical disruption to cash flow, and recruitment is a lesser priority than survival.”

The ISE also noted the labour market for school leavers was not projected to grow even before the crisis. It means the new figures indicate there will a drop in total jobs available, rather than merely a smaller expansion of recruitment than planned.

Isherwood said students should not “assume the jobs market is dead,” however. Many firms have rapidly moved recruitment and induction online. Health and pharmaceutical firms said they were increasing entry-level recruitment.

“Many employers are recruiting, and history tells us that we still see unfilled vacancies in a downturn. Switching off is the worst thing students can do.”

He encouraged anyone able to volunteer or seek part-time work to do so, and everyone to read up on careers websites and preparations for virtual interviews or assessments. “Whatever you do, be proactive. Have a story to tell when you do get that first interview,” he added.

Paul Nowak, deputy general secretary of the Trades Union Congress (TUC), told a committee of MPs last Thursday (14 May) it would be “absolutely criminal” to let young people move straight from education into unemployment.

Youth unemployment rates were already high and well above wider unemployment levels before the crisis, when many countries had seen a jobs boom. (Eurostat / House of Commons Library)

Nowak highlighted studies showing under-25s were more than twice as likely to work in sectors shut down by the government’s emergency coronavirus legislation. A recent study by the Resolution Foundation also predicted youth joblessness could hit one million this year.

The TUC has called for a “jobs guarantee,” with taxpayer-funded work placements to stop long-term youth unemployment. Nowak said similar schemes had been launched abroad and by the last Labour government after the global financial crisis.

“If people don’t get into the labour market soon after leaving education, they’re more likely to languish out of work for a long period of time,” he added.

A government spokesperson previously told Yahoo Finance UK officials were doing “everything we can” to protect the economy and opportunities for those leaving education. “We’ve launched a targeted employment campaign and a new online Skills Toolkit, helping to keep people learning and building their skills.”